What You Need to Know About Selling Your Business

Selling your business is a big decision with important financial implications. There are a range of things you need to do to ensure that it is the right decision for you and the process goes smoothly.

What you need to do before you sell

Firstly, it is important to understand your main reason for selling because it is one of the first questions a buyer will ask. For example:

  • Do you want to retire?
  • Do you want to do something different?
  • Is your business struggling?

Whatever the reason, it is important to get your business ready for sale well ahead of time. To get the best possible selling price, you need to make it as marketable as possible to potential buyers. This includes making sure that:

  • All your financial and customer records are as accurate and up to date as possible.
  • Your profits are as high as they can be in the period leading up to the sale.
  • Any business assets are in the best possible condition, including your premises.
  • You have all your important business documentation available (for example, your current lease or supplier agreements).

The team you need to sell a business

You will need a team to help you sell your business. Selling a business requires business, financial and legal expertise. Specialists that you may need on your team include:

  • An experienced accountant for your industry

Your accountant will be able to help you prepare up-to-date financial documentation to help you sell your business for the best possible price, including information to help assess the value of your business assets. These assets can include both tangible items and intangible assets such as intellectual property or business goodwill.  Further, your accountant will be able to inform you of the potential taxation impacts of any proposed sale.

  • An experienced business advisor/broker

Your business broker/advisor will be able to assess the value of your business based on industry benchmarks and help you to determine a listing price. Your broker/advisor will also be able to negotiate the best possible selling price with potential buyers on your behalf.

  • A legal specialist

A lawyer who is experienced in helping clients to buy and sell businesses will be able to help you prepare your contract of sale and advise you on your legal rights and obligations. They will also ensure that all legal paperwork is completed to transfer ownership of the business to the new owner once the selling price has been paid and transferred to you.

What you need to do after you sell

After your sale has gone through, you will need to finalise any associated tax issues, such as any remaining goods and services tax (GST) to be paid or any capital gains tax (CGT) that may be applicable to the sale.

Once again, it is important to use the services of an experienced accountant to help you finalise these important tax issues upon the sale. Your accountant will help to ensure that you claim any entitlements that may be available to you, such as GST credits or CGT concessions so that you do not pay any more tax than is necessary.

This content has been prepared by Wilson Pateras to further our commitment to proactive services and advice for our clients, by providing current information and events. Any advice is of a general nature only and does not take into account your personal objectives or financial situation. Before making any decision, you should consider your particular circumstances and whether the information is suitable to your needs including by seeking professional advice. You should also read any relevant disclosure documents. Whilst every effort has been made to verify the accuracy of this information, Wilson Pateras, its officers, employees and agents disclaim all liability, to the extent permissible by law, for any error, inaccuracy in, or omission from, the information contained above including any loss or damage suffered by any person directly or indirectly through relying on this information. Liability limited by a scheme approved under Professional Standards Legislation. 

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